Employee Benefits: How to Choose?
January 8, 2010
Lori asked me to help her select appropriate employer provided benefits in time for the submission deadline next week. Lori is a smart consumer and was already well down the path of making the best decisions for her situation, but many people who come to me have not made wise choices and often you have only one opportunity (at time of hire) or maybe one opportunity each year to change your selection. It is time well spent to not rely upon a fellow worker’s opinion, the least expensive choice or default to what-you-did-the-last-time when it comes to employer provided benefits.
Most people focus on their healthcare selections as well as pre-tax deductions for retirement savings plans or healthcare savings accounts -- and those absolutely are important. Unfortunately, many people then ignore or overlook life insurance and long term disability insurance options -- and these benefits often are available only if you select them at time of hire or maybe once a year. If they are offered during an annual open enrollment window, often coverage is conditioned upon passing a health exam that would have been waived had the selection be made at time of hire. Particularly if you have children and especially if you are a single parent, it is critical that you protect your ability to earn an income (disability insurance) and provide financial resources for your children should you die unexpectedly (life insurance). Employer-provided group benefits are not perfect, but for people on a tight budget they probably will be the most affordable option and offer some level of protection.
If you can not obtain sufficient information from your employer’s benefits personnel to make a decision, go out and pay a fee-only planner to help you. While not all fee-only planners offer their services on an hourly basis, an increasing number do and finding them is not hard. You can search national fee-only planner organization websites such as The Garrett Planning Network (www.garrettplanningnetwork.com) or The National Association of Personal Financial Advisors (www.napfa.org) for a planner in your area. It won’t take much of their time or yours and the potential benefit is tremendous.
Do not miss an opportunity to secure a benefit for you and your family at a comparatively inexpensive cost.